In issuing his approval, Judge Michael Kaplan wrote that the four projects "are unlikely to be profitable," and a sale would attract a new developer to complete them. "I will strongly suggest that the sale be approved on these lines."
The four New Jersey projects set to be auctioned off are Dayna Estates in Toms River, Hartley Estates in Toms River, Sterling Acres in Monroe Twp. and Prospect Ridge in Stafford Twp. The four are "basically too small for the company to focus on and the profitability to build out is not great," David Bruck, Kara's attorney, told the court.
The formal auction is slated for February 15, and the New Brunswick-based Magyar Bank has already put an opening bid on the table. Magyar officials say they will essentially erase Kara's debt and pay the company $300,000 in exchange for the properties.
The pending sale follows the recent disposition of two other Kara projects. A joint venture of Fenix Investment & Development, Morristown, NJ, and Riverside Capital Management, Shrewsbury, NJ, is paying a combined $14.4 million for Woodland Estates in Edison and Kara at Monroe in Monroe Twp. The proceeds are slated to pay off Kara's debt on the two projects, which is held by Investors Savings Bank.
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